I just read an article about Abby Joseph Cohen that appeared in this week’s New York Times Magazine. It was actually a brief interview conducted by Deborah Solomon, and when I finished reading it, I remembered why I had such a dim view of AJC who seems to have been resurrected from the dead. I just remember all of the dreadful calls she made back when the Tech Bubble burst, and now a decade later, she’s right back in the spotlight.
A few excerpts from the interview stand out. First, when she’s asked about the value of the financial services industry, AJC says, “without banks it’s hard to see how businesses would get the money they need to grow and to hire new workers.” I almost choked on this one, since there’s scant evidence banks are lending, and certainly not to small businesses. Instead, they’ve managed quite a nice business scheme; take in deposits, pay almost no interest, borrow from the Fed dirt cheap, buy government treasuries and pocket the difference. With such a low risk way to make nice profits, why go to the trouble of actually lending money to those individuals and companies in need?
Next, AJC goes on to say, “Let’s not lose track of the fact that most people need to borrow in order to buy a home, and if you don’t have banks, that’s not going to happen.” Hello?? Has AJC been keeping track of the housing market lately? Does she realize that over 10% of US homes are vacant? Does she know that big banks, like Wells Fargo, are advocating larger down payments to purchase homes? Exactly who qualifies for home loans these days?
Finally, when asked if she felt any responsibility for the 2008 economic meltdown, she sidesteps, actually saying it’s an odd question to ask. She goes on to say that there were multiple reasons; “bad decisions made by many different entities”. OK, fine. But as usual, and has been the case most often, she never even considers taking any of the responsibility, either as an individual or as a representative of one of the most storied investment bankers in history. No, instead, she would much prefer to have all the glory heaped upon her when she makes a good market call; which hasn’t been all that often.
Abby Joseph Cohen (born 1952 in Queens, New York) is an American economist and financial analyst on Wall Street. She is a partner and—as of March 2008—Senior U.S. investment strategist at Goldman Sachs. Prior to that date, she was Chief Investment Strategist. In 2001 she was named one of the 30 most powerful women in America by Ladies Home Journal. Read more